The study, sponsored by Cisco, showed strong consumer preferences for non-branch channels such as web, mobile, phone and ATM for many types of interactions. However, branches were the preferred channel for such things as “Apply for a loan” and “Support from banking representative”. (See below)

What explains the stark differences? First of all, as Ron Shevlin of Snarketing 2.0 says, just because a person visits a branch for help or to complete a transaction doesn’t necessarily mean that they prefer to do it that way. It may mean that the web site or phone representative was inadequate to meet the client’s needs.

Secondly, and not to get all snarkety myself (that’s Ron’s sole province), but clients really don’t want your help. Until they do.

Results Not Process

Much has been written about the so-called “customer experience”– everything that a customer comes in contact with during their lifetime interaction with your brand; direct and indirect, obvious and subtle, conscious and unconscious.

Successful firms correctly attempt to measure the expressed and latent needs of clients. The best keep in mind the words of the great ad man David Ogilvy, who has been variously quoted as saying multiple versions of “People don’t want quarter-inch drill bits, they want quarter-inch holes.”

I have long found inspiration in the work of now-retired Harvard Business School professor David H. Maister, and I have been using some variation of his 2×2 matrix below for at least a decade.

Maister uses a healthcare analogy to describe the key operational and profitability metrics of different departments, and I have found it useful to help financial firms think through their various activities and how they provide value to their clients.

Pharmacy (Low Touch/Standardized Process)

For a financial firm, these are the things that just need to get done quickly and accurately. For the most part clients have little preference as to how.

–

• Account Opening

• Transactions

• Balance Reporting

• Transfers

• Basic Service Issues

–

Nursing (High Touch/Standardized Process)

These are items that might need a little more hand-holding, even though the processes and protocols are still well defined, and good client-service skills can go a long way to improving client satisfaction.

–

• Standard Credit

• Product Advice

• Estate Settlement

• Discretionary Trust

• Complex Issues

–

Brain Surgery (Low Touch/Specialized Process)

These activities require specialized skills, but the real value comes from applying the expertise, not necessarily from the advisor/client relationship.

—

• Custom Credit

• Asset Allocation

• Basic Trust Admin

• Complex Assets

• Basic Estate Plans

–

Psychotherapy (High Touch/Specialized Process)

For financial firms (and especially wealth management firms), this is the top of the value chain. It’s what happens here that drives most loyalty/at-risk measures. Diagnosis is key, and it is from here where brain surgery may be prescribed.

–

• Goal Setting

• Financial Planning

• Complex Estates

• Succession Matters

• Nonfinancial Issues

• Moral Support

–

Bringing it All Together

Clients may well be willing to use your new app for certain things, utilize your web site to download transactions and contact your call center to change their address. Those things may improve your operating margins– as long as they work.

The face-to-face interactions that do the most to improve the client experience are not the ones that solve the issues that could have been (and should have been) solved via other channels. It’s the ones where they are really receiving the time and attention from someone who understands their situation and their goals and is helping them get to where they want to be.

Firms that succeed with affluent clients over an extended period of time do a number of things well. Through the work of my consulting firm Clientific we have distilled the twelve core principals that successful wealth managers follow.

The 12 C’s work like building blocks, from the bottom up. Begin with the first four, components of a strong strategy. Once those are set, work on the next four, the key elements of executing that strategy. Finally, the final four are the things that differentiate top firms from their competitors.

A solid strategy and strong execution provides a fulcrum upon which your differentiation can be leveraged. I have listed some sample questions to ask yourself for each point, but this is in no way an exhaustive list. Feel free to contact me at clientific.net if you have any questions or would like a custom assessment.

Strategy- What are you trying to accomplish?

Clientele– Who are your target customers? Who are your best customers today? Are you targeting high net worth clients, with over $1 million in assets? Or the ‘merely affluent’, those with $100,000 to $1 million? What about the ultra high net worth– those with $25 million or more? All are attractive segments, but the keys for success are different for each segment.

Clarity– What exactly is your value proposition? What problem(s) are you solving for your clients? What do you stand for? What do you not stand for? If you don’t have clarity about why you’re in the business and why others should do business with you, how will you expect your clients to know?

Context– How does your firm fit in to the competitive landscape? Are your competitors big banks? Community banks? What about independent brokerage and money management firms? How do the legal and accounting communities address wealth management needs– are they referral sources or competitors? How will you balance all of your stakeholders– clients, shareholders, employees, community, centers of influence?

Culture – What’s it like to work with you? What’s it like to work there? What kinds of things do you reward? How do you make decisions? What roles do you expect your team members to play, and how do they fit with one another? What kind of individual and team incentives do you have?

Execution- How are you going to do it?

Competence– ‘Great service’ alone is not enough in wealth management. Your team has to have the technical skills needed to meet the complex borrowing, investing, financial planning and estate planning needs of your clients. They also have to have the ‘EQ’ to attract, retain and grow client relationships. How will you assess your team’s talent? How will you develop skills and hold people accountable? Are your current processes adequate, or will you need to adapt new talent management protocols?

Consistency– Having great technical and interpersonal skills will only matter to your clients if you deliver results consistently and in a way that meets or exceeds their expectations. How will you manage consistent delivery and a consistent client experience?

Client Intimacy– It’s easy to assume that positive, friendly client relationships are close and intimate; yet their are countless examples of advisors being shocked to learn important details from a client that are already well know by a competitor. How will you advisors move from information to insight? Think of the difference between a monaural AM radio broadcast and a Dolby THX surround sound experience. Often the difference involves understanding and addressing non financial goals and issues of your clients.

Courage– It takes managerial courage to truly execute. The best plans and strategies are worthless without the tenacity and discipline to execute and make necessary course adjustments. General George S. Patton said “A good plan violently executed now is better than a perfect plan executed next week.” Change management, sales management, coaching– all kinds of leadership– require courage and discipline.

Differentiation- What makes you different?

Client Advocacy– The old saying “They don’t care how much you know until they know how much you care” is trite, but true. Clients have to trust you, and the most important element of trust is truly looking out for your client’s best interests. Character and integrity are table stakes, but you must be a true advocate for your client’s best interest. How do you demonstrate this to your clients?

Client Experience– What’s it really like to be your client? What are all the touch points clients have with you, and do they represent your brand the way you want? What about the automated letter they will receive if they accidentally overdraw their account that typically maintains six figures? Will they receive the same letter as every other customer? What will that do to their perception of your relationship? Do your call center, web presence and mobile offerings support your brand or detract from it?

Content– How do you communicate your ideas? You have already established what your company does and does not stand for, how do you demonstrate it? How do you present yourself as a thought leader? Do you have and communicate a distinctive viewpoint?

Connection– Content is usually outbound, but you have to have inbound communication channels too. What kinds of events do you attend and organize? How do you use social media to engage your clients? How do you really understand what your clients think about your brand, what they like and don’t like about your policies and practices?

We have entered a new era and the days of simply ‘build it and they will come’ is over. Firms that successfully address these and similar questions will be the ones that will succeed in this complex new era of wealth management.

I have been writing for some time now on the ‘intersection of leadership, advice and innovation’ and about why we are in the early stages of a new era of wealth management.

Today, my blog starts a new era too.

First, I am expanding the name of my eponymous blog from simply “jpnicols.com” to “Affluent Strategies by JP Nicols”.

The current web address is not changing, although you will soon be able to access the same site and the same content at http://www.AffluentStrategies.com as well. One site, two URLs.

Why?

What started as simply an outlet for me to express my observations and ideas has expanded into something that has grown beyond my expectations, and this site is now closing in on 10,000 views from more than 30 countries.

A common thread in most everything I have written has been to consider the potential implications for financial advisors working with affluent and high net worth clients, and simply putting my name in the browser window is probably less than descriptive for new and prospective readers.

Secondly, since I have started another website for my consulting firm clientific (and I would love it if you would visit me there too), I needed to make some small changes to keep each site unique and distinctive. On clientific.net I will focus more on the ‘advice’ component– practical and tactical ideas and solutions specifically for wealth management firms and fintech companies who serve the affluent market.

That will give me a little more room here to branch out just a little wider to cover other things I find interesting under the ‘leadership’ and ‘innovation’ signs of the intersection. I have been pleasantly surprised at the level of interest in these topics from far outside of the wealth management industry, and I will continue to spend time on general leadership and entrepreneurism topics.

I am also updating the color scheme a little bit and may undertake some other other design updates in the coming weeks to improve the user experience, but all of the existing content and tags will remain.

Thanks for reading and helping me get to this point. I hope you will find these changes a positive way to kick off a new era. Feel free to drop me a line and give me feedback so I can keep it useful for you.

THANK YOU!!!

Freedom isn’t free. Men and women throughout our history have paid the price, sometimes the ultimate price of their lives, to ensure your life of freedom is preserved for you now and long into the future. On this Veterans Day, we honor…we thank…we celebrate their courage, commitment and sacrifice for us; your fellow Americans.

Freedom Isn’t Free

And, this is why they fight and why we honor:

For freedom, they stand and fight:

Thank a Veteran today! Thank them for paving the road to continued freedom and fighting to ensure that our Country’s ideals are secured. We owe them more than a dedicated day on the calendar.

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(Via The Financial Brand) Congratulations to all of the winners in The Financial Brand’s Best Banking Blog poll. I am honored to count several of the winners amongst my friends. It is a group of smart, kind and funny people– what more could you want?

Congratulations as well to the Write-Ins & Other Honorable Mentions, along with the nominees, where I again am fortunate to recognize another great group of smart, kind and funny people I call friends. I am also humbled and grateful to even be mentioned in their company.

Again, from The Financial Brand, Write-Ins & Other Honorable Mentions:

(This post was also published today on the blog of my consulting firm clientific, follow me there too.)

Five massive foundational shifts are impacting financial service providers of all types, and they are impacting those that serve affluent clients in especially unique ways. Many of the strategies, skills and behaviors that enabled success in the past are now at best ineffective, and completely irrelevant in some cases. Advisors and firms serving affluent clients must adapt to these new realities to be successful in the future.

“If you don’t like change, you’re going to like irrelevance even less.”

— General Eric Shinseki, Chief of Staff, U. S. Army

The first shift is economic. The global financial crisis begun in 2008 is still having a long-term impact on the creation, growth and preservation of wealth. Today’s low growth, low yield environment will likely stick with us for some time, and today’s advisors have to be able to help their clients navigate the realities of the new economy. Firms cannot count on rising portfolio values to increase revenues.

The second shift is regulatory. Partially as a result of the financial meltdown, central banks and regulators all over the world are the in middle of redefining the rules and regulations that today’s financial advisors will likely have to live by for the rest of their careers. Some of the important revenue streams of the past have been curtailed or eliminated—think overdraft fees, payday loans, interchange fees, some mortgage fees, etc. And we are not even close to done, as of October 1, 2012 only one-third of the provisions of Dodd-Frank had been finalized, and another third have not yet even been proposed.

The third shift is demographic. Various research projects that anywhere from $18 Trillion and $56 Trillion of financial wealth will be passing down from the Traditionalist and Baby Boomer generations to their Generation X and Generation Y children and grandchildren over the next several years. Gen X and Gen Y could have a combined wealth that exceeds that of the Baby Boomers as early as 2018, and they do not want “their father’s Oldsmobile”. Even with the more conservative estimates, this is a huge threat for those advisors and firms who don’t adapt to the changes. And it is a massive opportunity for those that do.

The fourth shift is competitive. The global financial crisis caused the weakest firms to disappear while the biggest and strongest got bigger and stronger. (In some cases, only bigger.) It is more important than ever for smaller firms to differentiate themselves in ways that are really relevant. Simply being “the bank” of, say Cozad, for example is no longer enough.

The fifth shift is technological. The tools are already here to radically improve client intimacy and client engagement. The rapid adoption of the iPad and other tablets give wealth managers the opportunity to change the dynamics of the across-the-desk transaction into the shoulder-to-shoulder collaboration that really engages the client. Big data and analytics give firms the power to better understand client behaviors and preferences, if they bother to listen. Social media opens up whole new avenues of client contact.

The challenge will be for firms to adopt the right strategies and then have the discipline to execute. As in every era, we will have winners and we will have losers, and success will go to those who embrace the possibilities of the future while staying relevant to their clients.